FTC Issues Guidelines on Native Advertising

Ever read an article on the internet that has a link embedded in it that appears to be linking to information similar to the article, only to click on it and be pitched with something that is, at best, only remotely related to the original content? You’re not alone. This is Native Advertising at its worst. Native Advertising is intentionally created to look like part of the content in order to give it credibility in the eyes of the reader. The publishers and advertisers tried to make it appear okay by calling it promoted content, as if the content was independent of the advertisers. The deception got the attention of the FTC a couple of years back and now the body has given 11-pages of guidance for advertisers on, well, how to be honest.

Those little in content ads lead to big revenue. According to SocIntel360 spending on these ads will climb to $8.8B by 2018. This is not an insignificant amount of advertising. With the new FTC guidance advertisers will need to be more clear on the nature of the advertising and so I wonder if the $8.8B project is still inline. With the new guidelines, there may be fewer clicks reducing the spend for pay per click deals and the negated fee for placement deals.

However, the expense is not necessarily representative of the value. Advertisers may receive less traffic, but that traffic comes with higher intent as the initial ad was clearly identified as such. If done well, it can add value to the user experience and the value of each interaction, on average, will increase. Time will tell.

The IAB and publishers are not overly concerned, though the IAB did express some reservation about the wording in one section that refers to advertisers / publishers clearly identifying the content as an ad. There is more on their response in the Ad Age article on the FTC action.

FTC building - native advertisingFor now, the key elements of the FTC guidelines are here: FTC Native Ad Guidelines. The FTC provides direction on placement, prominence and clarity of meaning (it’s an Ad). The better publishers have been trying to keep the content and the ads relevant to their reader base and seem not to have any issue here.

The guidelines give plenty of examples and instructions. They also reference the 2013 guidelines for making disclosures. So, the new ad format still needs to follow basic disclosure practices.

An interesting note, and something that may eventually spur publisher concern is that the language refers to both publisher and advertiser responsibility in clear disclosures. Previously, it has been the advertisers’ responsibility. With the addition of the publishers on the block, it we may see them being more assertive in monitoring and enforcing guidelines.

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